LUTHERAN BROTHERHOOD FAMILY OF FUNDS, PRES14A, 1998-09-23

LUTHERAN BROTHERHOOD FAMILY OF FUNDS
PRES14A, 1998-09-23

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

- --------------------------------------------------------------------------------

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

THE LUTHERAN BROTHERHOOD FAMILY OF FUNDS
(Name of Registrant as Specified In Its Charter)

THE LUTHERAN BROTHERHOOD FAMILY OF FUNDS
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

The Lutheran Brotherhood Family of Funds
625 Fourth Avenue South
Minneapolis, Minnesota 55415

October , 1998

Dear Shareholder:

Please find enclosed a notice of a special meeting of shareholders of the
Lutheran Brotherhood Opportunity Growth Fund, Lutheran Brotherhood Mid Cap
Growth Fund, Lutheran Brotherhood World Growth Fund, Lutheran Brotherhood Fund,
Lutheran Brotherhood High Yield Fund, Lutheran Brotherhood Income Fund, Lutheran
Brotherhood Municipal Bond Fund and Lutheran Brotherhood Money Market Fund
(each, a "Fund"), each a series of The Lutheran Brotherhood Family of Funds,
which is scheduled for December 2, 1998, together with a proxy statement
discussing the matters to be voted on at the meeting. Please take the time to
read the proxy statement and cast your vote.

We are asking shareholders to elect trustees of The Lutheran Brotherhood
Family of Funds. In addition to the existing Trustees, the nominees include two
new nominees with outstanding credentials who are being nominated for the first
time to serve as Trustees: Jodi Harpstead and Richard A. Hauser.

We are also asking shareholders of each Fund to approve an amendment to the
existing advisory contract with Lutheran Brotherhood Research Corp. that will
authorize the Board of Trustees to reduce the advisory fees payable by your Fund
without the time and expense of a shareholder meeting. Shareholders are also
being asked to ratify the selection of PricewaterhouseCoopers LLP as the Trust's
independent accountants.

Finally, shareholders of the Lutheran Brotherhood Money Market Fund are
being asked to approve an amendment to that Fund's policy on industry
concentration that will provide the Fund with added flexibility to invest in
bank instruments.

Your Board of Trustees has unanimously recommended that shareholders of
each Fund vote for each of the proposals in the enclosed proxy statement. Should
you have any questions, please feel free to call us at (800) 328-4552. We will
be happy to answer any questions you may have.

TO ENSURE A QUORUM FOR A SPECIAL MEETING, I URGE EACH SHAREHOLDER TO
PROMPTLY MARK, SIGN AND RETURN THE ENCLOSED PROXY.

Sincerely,

ROLF F. BJELLAND
Chairman and President
<PAGE> 3

PRELIMINARY COPY

LUTHERAN BROTHERHOOD OPPORTUNITY GROWTH FUND
LUTHERAN BROTHERHOOD MID CAP GROWTH FUND
LUTHERAN BROTHERHOOD WORLD GROWTH FUND
LUTHERAN BROTHERHOOD FUND
LUTHERAN BROTHERHOOD HIGH YIELD FUND
LUTHERAN BROTHERHOOD INCOME FUND
LUTHERAN BROTHERHOOD MUNICIPAL BOND FUND
LUTHERAN BROTHERHOOD MONEY MARKET FUND

SERIES OF

THE LUTHERAN BROTHERHOOD FAMILY OF FUNDS
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON DECEMBER 2, 1998
------------------------

A Special Meeting of Shareholders of each of Lutheran Brotherhood
Opportunity Growth Fund, Lutheran Brotherhood Mid Cap Growth Fund, Lutheran
Brotherhood World Growth Fund, Lutheran Brotherhood Fund, Lutheran Brotherhood
High Yield Fund, Lutheran Brotherhood Income Fund, Lutheran Brotherhood
Municipal Bond Fund and Lutheran Brotherhood Money Market Fund (collectively,
the "Special Meeting"), each a series of The Lutheran Brotherhood Family of
Funds (the "Trust"), will be held at the Lutheran Brotherhood Building, 625
Fourth Avenue South, Minneapolis, Minnesota on December 2, 1998, at 9:00 a.m.
local time for the following purposes:

1. To elect Trustees of the Trust.

2. To amend the Master Advisory Contract to authorize the Trustees to
reduce advisory fees.

3. To ratify the selection of PricewaterhouseCoopers LLP as the
Trust's independent accountants.

4. To amend the industry concentration policy of the Lutheran
Brotherhood Money Market Fund.

5. To consider and act upon any matter incidental to the foregoing
and to transact such other business as may properly come before the Special
Meeting and all adjournments.

The Board of Trustees of the Trust has fixed the close of business on
September 30, 1998 as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Special Meeting and all adjournments.

IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN November 30, 1998. Instructions for shares held of record in the name of a
nominee, such as a broker-dealer or trustee of an employee benefit plan, may be
subject to cut-off dates established by such intermediaries to facilitate a
timely response.
By Order of the Board of Trustees
Otis F. Hilbert, Secretary

Minneapolis, Minnesota
October , 1998

YOUR VOTE IS IMPORTANT

YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE
UNABLE TO BE PRESENT IN PERSON, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE> 4

PRELIMINARY COPY

SERIES OF

THE LUTHERAN BROTHERHOOD FAMILY OF FUNDS
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
------------------------

PROXY STATEMENT
------------------------

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of The Lutheran Brotherhood Family of Funds
(the "Trust") to be used at a Special Meeting of Shareholders (collectively the
"Special Meeting") of shareholders of Lutheran Brotherhood Opportunity Growth
Fund ("LB Opportunity Growth Fund"), Lutheran Brotherhood Mid Cap Growth Fund
("LB Mid Cap Growth Fund"), Lutheran Brotherhood World Growth Fund ("LB World
Growth Fund"), Lutheran Brotherhood Fund ("LB Fund"), Lutheran Brotherhood High
Yield Fund ("LB High Yield Fund"), Lutheran Brotherhood Income Fund ("LB Income
Fund"), Lutheran Brotherhood Municipal Bond Fund ("LB Municipal Bond Fund") and
Lutheran Brotherhood Money Market Fund ("LB Money Market Fund") (each, a "Fund,"
and collectively, the "Funds") to be held at the Lutheran Brotherhood Building,
625 Fourth Avenue South, Minneapolis, Minnesota 55415, on December 2, 1998, at
9:00 a.m. local time and at any adjournments of the Special Meeting. This Proxy
Statement and the accompanying Notice of Special Meeting and Form of Proxy are
first being mailed on or about October , 1998 to shareholders of record as of
September 30, 1998.

The following table identifies each proposal set forth in the Notice of
Special Meeting of Shareholders and the checkmark (X) indicates the shareholders
of the Fund(s) that are being solicited to approve the proposal.

<TABLE>
<CAPTION>
LB OPPORTUNITY GROWTH FUND
LB MID CAP GROWTH FUND
LB WORLD GROWTH FUND
LB FUND
LB HIGH YIELD FUND
LB INCOME FUND LB MONEY
PROPOSAL LB MUNICIPAL BOND FUND MARKET FUND
-------- -------------------------- -----------
<S> <C> <C>
1. Election of Trustees........................ X X
2. Amendment of Master Advisory Contract....... X X
3. Ratification of Independent Accountants..... X X
4. Amendment of Concentration Policy........... X
</TABLE>
<PAGE> 5

Shareholders of record at the close of business on September 30, 1998 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting
and all adjournments thereof. The table below reflects the total number of
shares of each Series issued and outstanding as of the Record Date. Each
shareholder is entitled to the same number of votes as the number of full and
fractional shares held by such shareholder. Each share is entitled to one vote.

<TABLE>
<CAPTION>
SERIES NUMBER OF SHARES
------ ----------------
<S> <C>
LB Opportunity Growth Fund..................................
LB Mid Cap Growth Fund......................................
LB World Growth Fund........................................
LB Fund.....................................................
LB High Yield Fund..........................................
LB Income Fund..............................................
LB Municipal Bond Fund......................................
LB Money Market Fund........................................
</TABLE>

Each Fund will participate separately in the Special Meeting, although
proxies are being solicited through use of a combined Proxy Statement. With
respect to proposal 1 (regarding the election of Trustees of the Trust) and
proposal 3 (regarding the ratification of the selection of
PricewaterhouseCoopers LLP as the Trust's independent accountants) shareholders
of each Fund of the Trust will vote together with each other Fund of the Trust.
With respect to proposal 2 (regarding the amendment of the Master Advisory
Contract), shareholders of each Fund will vote separately. With respect to
proposal 4, only shareholders of the LB Money Market Fund will be entitled to
vote. All of the classes of shares (Class A, Class B and Institutional Class
shares) of a Fund will vote together as a single class on each proposal.

Any person giving a proxy may revoke it at any time prior to its use. A
shareholder may change a proxy by (1) giving written notice of revocation to an
officer of the Trust, (2) returning to an officer of the Trust a properly
executed later dated proxy, or (3) attending the Special Meeting, requesting
return of any previously delivered proxy and voting in person. Attendance and
voting at the Special Meeting will not in and of itself constitute a revocation
of a proxy. If the enclosed proxy is properly executed and returned in time to
be voted at the Special Meeting, the shares represented thereby will be voted in
accordance with the instructions on the proxy. Unless instructions to the
contrary are marked on the proxy, the proxy will be voted FOR all the proposals.
The proxy grants discretion to the persons named on the proxy, as proxies, to
take such further action as they may determine appropriate in connection with
any other matter which may properly come before the Special Meeting or any
adjournments. The Board of Trustees does not currently know of any matter to be
considered at the Special Meeting other than the matters set forth in the Notice
of Special Meeting of Shareholders.

For purposes of considering proposals 1 and 3, thirty percent of the
aggregate number of shares of the Trust entitled to vote constitutes a quorum.
For purposes of considering proposals 2 and 4, thirty percent of the shares of a
Fund entitled to vote at the Special Meeting in person or represented by proxy
constitutes a quorum of such Fund. In the event a quorum is not present at the
Special Meeting with respect to one or more Funds, or in the event a quorum is
present at the Special Meeting but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or more
adjournments of such Special Meeting with respect to one or more Funds without
further notice to permit further solicitation of proxies. A shareholder vote may
be taken on one or more of the proposals in this Proxy Statement prior to such
adjournment if sufficient votes have been received. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
Special Meeting in person or by proxy.

A plurality of the aggregate votes cast in person or by proxy at the
Special Meeting at which a quorum is present will be required for the election
of each Trustee. Approval of proposals 2 and 4 will require the

2
<PAGE> 6

affirmative vote of a "majority of the outstanding voting securities" of the
Fund entitled to vote on such proposal as defined in the 1940 Act. For this
purpose, a vote of the holders of a "majority of the outstanding voting
securities" of a Fund means the lesser of (i) the vote of 67% or more of the
shares of the Fund present at the Special Meeting if the holders of more than
50% of the outstanding shares of the Fund are present or represented by proxy or
(ii) the vote of more than 50% of the outstanding shares of the Fund. Approval
of proposal 3 requires the affirmative vote of a majority of the shares of the
Trust voted at the Special Meeting.

For purposes of determining the presence or absence of a quorum for
transacting business at the Special Meeting and for determining whether
sufficient votes have been received for approval of any matter to be acted upon
at the Special Meeting, abstentions and broker "non-votes" (that is, proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not
have, or choose not to exercise, discretionary power), will be treated as shares
that are present at the Special Meeting and entitled to vote on the matter, but
which have not been voted. Accordingly, abstentions and broker non-votes will be
treated as present for purposes of determining whether a quorum is present. When
counted as present, abstentions and broker non-votes will have no effect on the
determination of proposals 1 and 3. Abstentions and broker non-votes, however,
will have the practical effect of a "No" vote for purposes of obtaining the
requisite vote for approval of proposals 2 and 4.

The Board of Trustees expects to make this solicitation primarily by mail.
However, in addition to the solicitation of proxies by mail, the officers of the
Trust and members of the Board of Trustees and persons affiliated with Lutheran
Brotherhood Research Corp. ("LB Research"), the investment adviser for each
Fund, and Lutheran Brotherhood Securities Corp. ("LB Securities"), the
distributor of shares for each Fund, may, without remuneration, solicit proxies
personally or by telephone, telegram or other electronic means. The Trust may
also retain a proxy solicitation firm to assist in any special, personal
solicitation of proxies. The costs of solicitation and expenses incurred in
connection with preparing this Proxy Statement, including any cost of retaining
a proxy solicitation firm, will be borne by the Funds. The Trust will reimburse
brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of shares.

The financial statements of each Fund for the year ended October 31, 1997
are included in the annual report of the Funds for the year ended October 31,
1997, which has been previously sent to shareholders. The financial statements
for each Fund for the six months ended April 30, 1998 are included in a
semi-annual report of the Funds for the six months ended April 30, 1998, which
has been previously sent to shareholders. THE TRUST WILL FURNISH UPON REQUEST
AND WITHOUT CHARGE TO ANY SHAREHOLDER A COPY OF SUCH REPORTS. A SHAREHOLDER MAY
ALSO OBTAIN A COPY OF SUCH REPORTS BY WRITING TO THE LUTHERAN BROTHERHOOD FAMILY
FUNDS, 625 FOURTH AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55415 OR BY CALLING TOLL
FREE (800) 328-4552.

As of September 30, 1998, the following persons or entities were the
beneficial and/or record owners of 5% or more of the shares of the indicated
Fund:

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
NAME OF FUND BENEFICIAL OWNER BENEFICIAL OWNERSHIP % OF SHARES
------------ ------------------- -------------------- -----------
<S> <C> <C> <C>
LB Opportunity Growth Fund
LB Mid Cap Growth Fund
LB World Growth Fund
LB Fund
LB High Yield Fund
LB Income Fund
LB Municipal Bond Fund
LB Money Market Fund
</TABLE>

3
<PAGE> 7

PROPOSAL 1

ELECTION OF TRUSTEES

The shareholders of the Trust are being asked to elect the nominees named
below to serve as Trustees of the Trust. All shares represented by valid proxies
will be voted in favor of the election of the nominees, unless authority to vote
therefor is withheld. The nominees named have agreed to serve as Trustees if
elected. If for any reason any of the nominees should not be available for
election as contemplated, the proxies hereby solicited may, unless otherwise
limited, be voted to elect such substitute nominees, if any, as may be
designated by the Board of Trustees, subject to the applicable provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"). Messrs. Bjelland
and Eggerding, Ms. Levi and Ms. Randall have been previously elected by
shareholders. Messrs. Estenson and Nicholson currently serve as Trustees and are
being presented for shareholder election for the first time. This election will
help assure continued compliance with 1940 Act provisions regarding the election
of Trustees. Background information on all of the Trustees has been provided.

<TABLE>
<CAPTION>
NOMINEE STANDING YEAR FIRST BECAME
FOR ELECTION BY TRUSTEE [OR DIRECTOR OF
SHAREHOLDERS POSITION WITH TRUST PREDECESSOR(1)]
---------------- ------------------- ------------------------
<S> <C> <C>
Rolf F. Bjelland* Chairman, Trustee and President 1986
Herbert F. Eggerding, Jr. Trustee 1990
Noel K. Estenson Trustee 1997
Jodi Harpstead (2) --
Richard A. Hauser (2) --
Connie M. Levi Trustee 1993
Bruce J. Nicholson* Trustee 1995
Ruth E. Randall Trustee 1987
</TABLE>

- ---------------

* Individual who is deemed to be an "interested person" of the Trust under the
1940 Act because of his affiliation with LB Research.

(1) In 1993, the Trust became the successor to Lutheran Brotherhood Opportunity
Growth Fund, Inc., Lutheran Brotherhood High Yield Fund, Inc., Lutheran
Brotherhood Income Fund, Inc., Lutheran Brotherhood Municipal Bond Fund,
Inc. Lutheran Brotherhood Fund, Inc. and Lutheran Brotherhood Money Market
Fund, Inc. (the "Predecessor Corporations") and all of the then Directors
of the Predecessor Corporations became Trustees of the Trust.

(2) Ms. Harpstead and Mr. Hauser are being nominated for the first time to
serve as Trustees of the Trust.

Information on all the nominees is set forth below in alphabetical order.

ROLF F. BJELLAND is Executive Vice President and Chief Investment Officer
of Lutheran Brotherhood. Mr. Bjelland also serves as Director and President of
LB Research, Director and Executive Vice President of Lutheran Brotherhood
Financial Corporation; Director of LB Securities; Director, Vice President and
Chief Investment Officer of Lutheran Brotherhood Variable Insurance Products
Company; and Director of Lutheran Brotherhood Real Estate Products Company. Mr.
Bjelland is also Director, Chairman and President of LB Series Fund, Inc. Mr.
Bjelland is 60.

HERBERT F. EGGERDING, JR. serves as a management consultant to several
privately owned companies and was formerly Executive Vice President and Chief
Financial Officer of Petrolite Corporation. Mr. Eggerding's

4
<PAGE> 8

other principal business affiliation is Director of Lutheran Charities
Foundation of St. Louis, Missouri. Mr. Eggerding is also a Director of LB Series
Fund, Inc. Mr. Eggerding is 61.

NOEL K. ESTENSON'S principal occupation during the past five years has been
President and Chief Executive Officer of CENEX, Inc. Mr. Estenson's other
principal business affiliations include Vice Chairman of CF Industries; Board
member of the National Cooperative Refinery Association; Board member of Farm
Credit Leasing; and Board member of the National Council of Farmer Cooperatives.
Mr. Estenson is also a Director of LB Series Fund, Inc. Mr. Estenson is 59.

JODI HARPSTEAD is Vice President of U.S. Cardiac Rythm Management for
Medtronic, Inc. Ms. Harpstead previously served as Boston District Pacing Sales
Manager and Vice President, U.S. Cardiac Rythm Management Marketing for
Medtronic. Ms. Harpstead is also a Member of the Board of Delta Dental Plan of
Minnesota. Ms. Harpstead is 41.

RICHARD A. HAUSER is a partner with the law firm of Baker and Hostetler
LLP. Previously, Mr. Hauser served as Chairman of the Pennsylvania Avenue
Development Corporation. Mr. Hauser is also a Director of The Luther Institute.
Mr. Hauser is 55.

CONNIE M. LEVI is retired and was formerly President of the Greater
Minneapolis Chamber of Commerce. Previously, Ms. Levi served in the Minnesota
House of Representatives from 1978 to 1986. Ms. Levi is a Director of Norstan,
Inc. of Minnesota. Ms. Levi is also a member or director of numerous
governmental, public service and non-profit boards and organizations. Ms. Levi
is also a Director of LB Series Fund, Inc. Ms. Levi is 59.

BRUCE J. NICHOLSON is Executive Vice President and Chief Operating Officer
of Lutheran Brotherhood, Executive Vice President and Chief Operating Officer of
Lutheran Brotherhood Financial Corporation and Director and Chief Operating
Officer, Lutheran Brotherhood Variable Insurance Products Company. Mr. Nicholson
is also Director of LB Research; Director of LB Securities; Director of Lutheran
Brotherhood Real Estate Products Company; and Director of LB Series Fund, Inc.
Mr. Nicholson is 51.

RUTH E. RANDALL is retired and was formerly Interim Dean, Division of
Continuing Studies, University of Nebraska-Lincoln; Associate Dean, Teachers
College, and Professor, Department of Education Administration, Teachers
College, University of Nebraska-Lincoln. Dr. Randall also previously served as
Commissioner of Education for the State of Minnesota and as a Director or member
of numerous governmental, public service and non-profit boards and
organizations. Dr. Randall is also a Director of LB Series Fund, Inc. Dr.
Randall is 69.

A nominee elected as a Trustee will serve as such until any successor is
elected and qualified. A Trustee serves until he or she retires, resigns or is
removed as provided in the First Amended and Restated Agreement of the Trust
dated as of September 1, 1993 (the "Master Trust Agreement"). Under the Master
Trust Agreement, a person may not serve as Trustee beyond the end of the month
in which he or she attains the age of 70. The Trust is not required to hold
regularly scheduled annual meetings for the election of Trustees.

The following persons are principal officers, but not Trustees, of the
Trust:

JAMES R. OLSON has served as Vice President of the Trust since 1993. Mr.
Olson is Senior Vice President of Lutheran Brotherhood, Vice President of
Lutheran Brotherhood Variable Insurance Products Company, Vice President of LB
Research, Vice President of LB Securities, Vice President of Lutheran
Brotherhood Real Estate Products Company, and Vice President of LB Series Fund,
Inc. He is 56.

RICHARD B. RUCKDASHEL has served as Vice President of the Trust since 1995.
Mr. Ruckdashel is Vice President of Lutheran Brotherhood, Vice President of
Lutheran Brotherhood Variable Insurance Products Company, Vice President of LB
Securities and Vice President of LB Series Fund, Inc. He is 43.
5
<PAGE> 9

JAMES M. WALLINE has served as Vice President of the Trust since 1993. Mr.
Walline is Vice President of Lutheran Brotherhood, Vice President of LB
Research, Vice President of Lutheran Brotherhood Variable Insurance Products
Company, and Vice President of LB Series Fund, Inc. He is 53.

WADE M. VOIGT has served as Treasurer of the Trust since 1993. Mr. Voigt is
Assistant Vice President of Mutual Fund Accounting for Lutheran Brotherhood and
Treasurer of LB Series Fund, Inc. He is 42.

OTIS F. HILBERT has served as Secretary and Vice President of the Trust
since 1993. Mr. Hilbert is Vice President of Lutheran Brotherhood, Vice
President and Secretary of LB Securities, Secretary of LB Research, Vice
President and Secretary of Lutheran Brotherhood Real Estate Products Company,
Vice President and Assistant Secretary of Lutheran Brotherhood Variable
Insurance Products Company, and Secretary and Vice President of LB Series Fund,
Inc. He is 61.

FRED P. JOHNSON has served as Vice President of the Trust since June 10,
1998. Mr. Johnson is Assistant Vice President of Lutheran Brotherhood, Assistant
Vice President of Lutheran Brotherhood Variable Insurance Products Company,
Assistant Vice President of LB Securities and Assistant Vice President of LB
Research. He is 38.

As of September 21, 1998, the Trustees and officers of the Trust as a group
owned beneficially less than 1% of the outstanding shares of each Fund.

BOARD MEETINGS AND COMMITTEES

During the fiscal year ended October 31, 1997, the Board of Trustees held a
total of four meetings. The Board of Trustees has two committees: an Audit
Committee and a Contracts Committee. All Trustees attended 75% or more of all
meetings of the Board of Trustees and committees of which they were members
during the fiscal year ended October 31, 1997.

The present members of the Audit Committee are Ms. Levi (Chairman) and
Messrs. Eggerding, Estenson and Dr. Randall. The Audit Committee assists the
Board of Trustees in fulfilling its duties relating to accounting and financial
reporting practices and serves as a direct line of communication between the
Board of Trustees and the Trust's independent accountants. The Audit Committee
is responsible for recommending the engagement or retention of the Trust's
independent accountants, reviewing with the independent accountants the plan and
the results of the auditing engagement, approving professional services provided
by the independent accountants prior to the performance of such services,
considering the range of audit and non-audit fees, reviewing the independence of
the independent accountants, reviewing the scope and results of procedures of
internal auditing, and reviewing the system of internal accounting control. The
Audit Committee of the Board of Trustees held four meetings during the fiscal
year ended October 31, 1997.

The present members of the Contracts Committee are Mr. Eggerding
(Chairman), Mr. Estenson, Ms. Levi and Dr. Randall. The function of the
Contracts Committee is to assist the Board of Trustees in fulfilling its duties
with respect to the review and approval of contracts between the Trust and other
entities, including entering into new contracts and the renewal of existing
contracts. The Contracts Committee considers investment advisory, distribution,
transfer agency, administrative service and custodial contracts, and such other
contracts as the Board of Trustees deems necessary or appropriate for the
continuation of operations of each Fund. The Contracts Committee held 4 meetings
during the fiscal year ended October 31, 1997. The Contracts Committee also acts
in the capacity of a nominating committee whose duties include consideration of
recommendations on nominations for Trustees, review of the composition of the
Board, and recommendations respecting attendance, frequency of meetings and
similar matters. The Contracts Committee will consider nominees recommended by
shareholders. Shareholders may submit recommendations to the attention of the
Secretary of the Trust, 625 Fourth Avenue South, Minneapolis, Minnesota 55415.

6
<PAGE> 10

REMUNERATION OF TRUSTEES.

Trustees who are not interested persons of the Trust receive an annual
retainer of $23,500 and a fee of $9,000 per year to attend meetings of the Board
of Trustees. Messrs. Bjelland and Nicholson, who are interested persons of the
Trust, receive no fees from the Trust. The Trustees receive no pension or
retirement benefits in connection with their service to the Fund.

For the fiscal year ended October 31, 1997, the Trustees of the Trust
received the following amounts of compensation either directly or in the form of
payments made into a deferred compensation plan:

<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL PAID BY THE TRUST
NAME AND POSITION COMPENSATION AS PART OF TRUST BENEFITS UPON AND FUND
OF PERSON FROM TRUST EXPENSES RETIREMENT COMPLEX(1)
----------------- ------------ ---------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Rolf F. Bjelland(2)................ $ 0 $ 0 $ 0 $ 0
Chairman and Trustee
Herbert F. Eggerding, Jr........... $17,170 $ 0 $ 0 $31,000
Trustee
Noel K. Estenson................... $ 4,536 $ 0 $ 0 $ 8,125
Trustee
Connie M. Levi..................... $17,170 $ 0 $ 0 $31,000
Trustee
Bruce J. Nicholson(2).............. $ 0 $ 0 $ 0 $ 0
Trustee
Ruth F. Randall.................... 17,$170.... 0.....$.... 0.....$.... $31,000
Trustee
</TABLE>

- ---------------

(1) The "Fund Complex" includes The Lutheran Brotherhood Family of Funds and LB
Series Fund, Inc.

(2) "Interested person" of the Trust as defined in the 1940 Act.

REQUIRED VOTE

A plurality of the aggregate votes cast in person or by proxy at the
Special Meeting at which a quorum is present, is required for the election of
each Trustee. Shareholders of all Funds will vote together as a single class on
proposal 1.

RECOMMENDED SHAREHOLDER ACTION

The Trustees, including those Trustees who are not interested person of the
Trust, unanimously recommend that shareholders vote FOR approval of proposal 1.

7
<PAGE> 11

PROPOSAL 2

TO AMEND THE MASTER ADVISORY CONTRACT
TO AUTHORIZE THE TRUSTEES TO REDUCE ADVISORY FEES
WITHOUT SHAREHOLDER APPROVAL

Shareholders of each Fund are being asked to approve an amendment to the
Master Advisory Contract dated as of November 1, 1993 (the "Advisory Contract")
that would allow the Trustees of the Trust to amend the Advisory Contract at any
time to reduce the advisory fees payable by one or more Funds to LB Research
without shareholder approval.

Under its current terms, any amendments to the Advisory Contract with
respect to a Fund must be approved by LB Research and a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund. If
proposal 2 is approved, Section 8(b) of the Advisory Contract would be amended
to read as follows:

(b) Amendment. No amendment to this Agreement shall become
effective with respect to a Fund unless approved by (i) the
Adviser, (ii) vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of that Fund and (iii)
vote of the Trustees, including a majority of the Trustees who are
not parties to this Agreement or "interested persons" (as defined
in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such approval; provided,
however, that approval by vote of a majority of the outstanding
voting securities of a Fund shall not be required with respect to
any amendment that reduces the investment advisory fees payable by
a Fund under the Agreement."

The staff of the Division of Investment Management of the Securities and
Exchange Commission (the "SEC Staff") has taken the position that shareholder
approval is not required under Section 15(c) of the 1940 Act in order to amend
advisory agreements to reduce the advisory fees payable thereunder. However,
under the current terms of the Advisory Agreement, an amendment to reduce
advisory fee would require shareholder approval. The proposed amendment would
allow the Trustees to consider proposals to reduce advisory fees payable by a
Fund without the time and expense associated with a shareholder meeting. In
considering any proposal to reduce advisory fees, the Board of Trustees would
confirm with LB Research that it would continue to provide the same quality and
quantity of services to the Fund following any reduction in advisory fees. If
Proposal 2 is approved by shareholders, the Trustees intend to amend the
Advisory Contract in order to incorporate into the Advisory Contract the current
permanent waiver of a portion of advisory fee for each of the Funds equal to
0.25% of the average daily net assets of the Fund.

LB Research currently serves as investment adviser to each Fund pursuant to
the Advisory Contract. The Advisory Contract was last approved by shareholders
on October 28, 1993. The Board of Trustees of the Trust last approved the
continuation of the Advisory Contract at a meeting of the Board of Trustees on
December 4, 1997. The Advisory Contract will continue in effect until December
31, 1998 (and may be continued from year to year thereafter unless terminated in
accordance with its terms.

LB Research, was organized as a Pennsylvania corporation in 1969 and was
reincorporated as a Minnesota corporation in 1987. It has been in the investment
advisory business since 1970. LB Research is a wholly-owned subsidiary of
Lutheran Brotherhood Financial Corporation which, in turn, is a wholly-owned
subsidiary of Lutheran Brotherhood, a fraternal benefit society. In addition to
Messrs. Bjelland and Nicholson, the other directors of LB Research are Robert P.
Gandrud, David W. Angstadt, David J. Larson, Jerald E. Sourdiff and Jennifer H.
Martin. All of the directors are employees of Lutheran Brotherhood. Mr. Gandrud
is the President and Chief Executive Officer of Lutheran Brotherhood. Mr.
Angstadt is the Executive Vice President and Chief Marketing Officer of Lutheran
Brotherhood. Mr. Larson is the Senior Vice President,

8
<PAGE> 12

Secretary, and General Counsel of Lutheran Brotherhood, Mr. Sourdiff is the
Senior Vice President and Chief Financial Officer of Lutheran Brotherhood and
Ms. Martin is Senior Vice President of Lutheran Brotherhood. The address of each
of the principal executive officer and directors of LB Research is 625 Fourth
Avenue South, Minneapolis, Minnesota 55415.

Investment decisions for each of the Funds, except the LB Opportunity
Growth Fund and the LB World Growth Fund, are made by LB Research, subject to
the overall direction of the Board of Trustees. LB Research provides overall
investment supervision of the LB Opportunity Growth Fund's and the LB World
Growth Fund's investments, with investment decisions for both Funds being made
by an investment sub-advisor. Except for the LB Opportunity Growth Fund and the
LB World Growth Fund, LB Research provides investment research and supervision
of each Fund's investments and conducts a continuous program of investment
evaluation and appropriate disposition and reinvestment of each Fund's assets.
LB Research assumes the expense of providing the personnel to perform its
advisory functions. Lutheran Brotherhood, the indirect parent company of LB
Research, also serves as the investment adviser for LB Series Fund, Inc.
Investment decisions for the LB Opportunity Growth Fund are made by T. Rowe
Price Associates, Inc. ("T. Rowe Price"), which LB Research has engaged as the
sub-advisor for the Fund. T. Rowe Price manages the LB Opportunity Growth Fund
on a daily basis, subject to the overall direction of LB Research and the Funds'
Board of Trustees. Investment decisions for the LB World Growth Fund are made by
Rowe Price-Fleming International, Inc. ("Price-Fleming"), which LB Research has
engaged as the sub-advisor for the Fund. Price-Fleming manages LB World Growth
Fund on a daily basis, subject to the overall direction of LB Research and the
Funds' Board of Trustees.

The Advisory Contract provides that it shall continue in effect with
respect to each Fund from year to year as long as it is approved at least
annually both (i) by a vote of a majority of the outstanding voting securities
of such Fund (as defined in the 1940 Act) or by the Trustees of the Trust, and
(ii) in either event by a vote of a majority of the Trustees who are not parties
to the Advisory Contract or "interested persons" of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval. The
Advisory Contract may be terminated on 60 days' written notice by either party
and will terminate automatically in the event of its assignment, as defined
under the 1940 Act and regulations thereunder. Such regulations provide that a
transaction which does not result in a change of actual control or management of
an adviser is not deemed an assignment.

LB Research receives an annual investment advisory fee from each Fund.
Information on the advisory fees payable by each Fund and the total advisory
fees paid to LB Research during the fiscal year ended October 31, 1997 is set
forth on Exhibit A. LB Securities, a wholly-owned subsidiary of LB Research,
provides administrative personnel and services necessary to operate the Funds.
In addition, LB Securities provides transfer agency services to the Funds.
Information on the total dollar amounts paid to LB Securities for administrative
and transfer agency services for the fiscal year ended October 31, 1997 is set
forth on Exhibit B.

REQUIRED VOTE

Approval of Proposal 2 by a Fund requires the affirmative vote of "a
majority of the outstanding voting securities" of the Fund, as defined in the
1940 Act. Under the 1940 Act, a vote of a majority of the outstanding voting
securities of a Fund means the lesser of (a) more than 50% of the outstanding
shares of the Fund, or (b) 67% or more of the shares of the Fund represented at
the Special Meeting if more than 50% of the outstanding shares of the Fund are
present at the Special Meeting or represented by proxy. Shareholders of each
Fund will vote as a separate class on proposal 2.

9
<PAGE> 13

RECOMMENDED SHAREHOLDER ACTION

At a meeting of the Board of Trustees of the Trust held on September 16,
1998, a majority of the Trustees, including the Trustees who are not interested
persons of the Trust or LB Research within the meaning of the 1940 Act, approved
a proposed amendment to the Advisory Contract and recommended that the proposed
amendment be submitted to the shareholders of each Fund for approval. THE BOARD
OF TRUSTEES OF THE TRUST, INCLUDING THE TRUSTEES WHO ARE NOT INTERESTED PERSONS
OF THE TRUST, UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE FOR
APPROVAL OF PROPOSAL 2.

PROPOSAL 3

TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP
AS THE TRUST'S INDEPENDENT ACCOUNTANTS

At a meeting held on December 4, 1997, the Board of Trustees of the Trust
selected the firm of Price Waterhouse LLP, which subsequently merged with
Coopers and Lybrand LLP to become PricewaterhouseCoopers LLP
("PriceWaterhouseCoopers"), as the independent accountants for the Trust for its
fiscal year ending October 31, 1998. Shareholders of each Fund are being asked
to ratify the selection of PriceWaterhouseCoopers to serve as the independent
accountants to the Trust for this period. PriceWaterhouseCoopers has served as
independent accountants to the Trust and its Predecessor Corporations since
1988, providing customary professional services in connection with the audit of
the Trust. Their fees for such services include fees for work leading to the
expression of opinions on the financial statements included in reports to
shareholders, opinions on financial statements and other data included in the
Trust's annual report to the Securities and Exchange Commission, and opinions on
financial statements included in amendments to the Trust's Registration
Statement. For the fiscal year ended October 31, 1997, fees paid to the
accountants for the Trust represented fees for audit services described above.
In approving such fees, the Audit Committee of the Board of Trustees considered
the possible effect thereof in the independence of the accountants.
Representatives of PriceWaterhouseCoopers are not expected to attend the Special
Meeting but will be available by telephone to answer should any questions that
may arise during the Special Meeting.

REQUIRED VOTE

Approval of proposal 3 requires the affirmative vote of a majority of the
shares of the Trust voted at the Special Meeting, provided a quorum is present.
Shareholders of all Funds will vote together as a single class on proposal 3.

RECOMMENDED SHAREHOLDER ACTION

The Trustees, including those Trustees who are not interested person of the
Trust, unanimously recommend the shareholders vote FOR approval of proposal 3.

PROPOSAL 4

(FOR LB MONEY MARKET FUND ONLY)
TO AMEND THE FUNDAMENTAL POLICY REGARDING INDUSTRY
CONCENTRATION

The Board of Trustees has proposed that the shareholders of the LB Money
Market Fund approve an amendment to the fundamental investment policy regarding
industry concentration. Under the 1940 Act, all investment policies of a mutual
fund must be classified as either "fundamental" or "non-fundamental." A

10
<PAGE> 14

fundamental policy may not be changed without the approval of the fund's
shareholders. Under the LB Money Market Fund's current fundamental policy:

"The Fund may not invest in a security if the transaction would result in 25% or
more of the Fund's total assets being invested in any one industry."

If proposal 4 is approved, the new fundamental policy of LB Money Market
Fund will be:

"The Fund may not invest in a security if the transaction would result in 25% or
more of the Fund's total assets being invested in any one industry. With respect
to Lutheran Brotherhood Money Market Fund, this restriction does not apply to
Government Securities (as such term is defined in the Investment Company Act of
1940) or instruments issued by domestic banks as described in the Lutheran
Brotherhood Money Market Fund's Prospectus or Statement of Additional
Information."

The 1940 Act requires every mutual fund to include in its registration
statement a policy with respect to industry concentration. The SEC staff takes
the position that a fund that invests more than 25% of the value of its assets
in any one industry is concentrating in that industry. The SEC Staff, however,
permits a money market fund to reserve the freedom of action to concentrate in
"government securities" (as defined in the 1940 Act) and instruments issued by
domestic banks. If proposal 4 is adopted, LB Money Market Fund would have the
discretion to (but would not be required to) invest more than 25% of its assets
in U.S. government securities and instruments issued by domestic banks. Such
bank instruments would include certificates of deposit, bankers' acceptances or
similar short-term liquid instruments. Under the amended concentration policy,
United States branches of foreign banks may be considered as "domestic banks" if
it can be demonstrated that they are subject to the same regulations as United
States banks. In addition, foreign branches of United States banks may be
treated as domestic banks if the United States parent would be unconditionally
liable in the event that the foreign branch failed to pay on its instruments.
The Trust intends to include disclosure in the Statement of Additional
Information concerning the type and nature of the various bank instruments in
which the LB Money Market Fund intends to invest. The Board of Trustees believes
that the revised policy will increase the flexibility of LB Research in managing
LB Money Market Fund consistent with industry practice.

REQUIRED VOTE

Approval of proposal 4 requires the affirmative vote of "a majority of the
outstanding voting securities" of LB Money Market Fund under the 1940 Act. Under
the 1940 Act, a vote of a majority of the outstanding voting securities means
the lesser of (a) more than 50% of the outstanding share of the LB Money Market
Fund or (b) 67% or more of the shares of the LB Money Market Fund represented at
the Special Meeting if more than 50% of the outstanding shares of the Fund are
present at the Special Meeting or represented by proxy. Shareholders of the LB
Money Market Fund will vote together as a single class on proposal 4.

RECOMMENDED SHAREHOLDER ACTION

The proposed amendment was approved by the Board of Trustees at a meeting
held on September 16, 1998. The Trustees, including those Trustees who are not
interested persons of the Trust, unanimously recommend that shareholders vote
FOR approval of proposal 4.

11
<PAGE> 15

OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING

The Board of Trustees does not know of any other matter to be considered at
the Special Meeting other than those referred to above. If any other matters are
properly brought before the Special Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their best
judgment.

NO ANNUAL MEETINGS OF SHAREHOLDERS

There will be no annual or further special meetings of shareholders of the
Trust unless required by applicable law or called by the Trustees in their
discretion. The next meeting of the shareholders of the Trust will be held at
such time as the Board of Trustees may determine or at such time as may be
legally required. Shareholders wishing to submit proposals for inclusion in a
proxy statement for a subsequent shareholder meeting should send their written
proposals to the Secretary of the Trust, 625 Fourth Avenue South, Minneapolis,
Minnesota 55415. Shareholder proposals should be received in a reasonable time
before the solicitation is made.

WHETHER OR NOT YOU PLAN TO ATTEND THIS SPECIAL MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.

October , 1998
Date of Proxy Statement

12
<PAGE> 16

EXHIBIT A

<TABLE>
<CAPTION>
RATES OF ANNUAL AGGREGATE
ADVISORY ADVISORY
FEE AS A FEES PAID
PERCENTAGE FOR THE
CONTRACTUAL RATES OF ANNUAL LESS OF AVERAGE DAILY FISCAL YEAR
ADVISORY FEE AS A PERCENTAGE PERMANENT NET ASSETS AFTER ENDED
NAME OF FUND OF AVERAGE DAILY NET ASSETS WAIVER(1) PERMANENT WAIVER OCTOBER 31, 1997
------------ ---------------------------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
LB Fund(2) On the portion of the Fund
which is:
$500,000,000 or less...... .65% (.25%) .40% $5,686,741(3)
Over $500,000,000 but not
over $1,000,000,000..... .60% (.25%) .35%
Over $1,000,000,000....... .55% (.25%) .30%
LB Opportunity Growth Fund On the portion of the Fund
which is:
$100,000,000 or less...... .75% (.25%) .50% $1,868,475
Over $100,000,000 but not
over $250,000,000....... .65% (.25%) .40%
Over $250,000,000 but not
over $500,000,000....... .60% (.25%) .35%
Over $500,000,000 but not
over $1,000,000,000..... .55% (.25%) .30%
Over $1,000,000,000....... .50% (.25%) .25%
LB Income Fund(2) On the portion of the Fund
which is:
$500,000,000 or less...... .60% (.25%) .35% $4,799,245(4)
Over $500,000,000 but not
over $1,000,000,000..... .575% (.25%) .325%
Over $1,000,000,000....... .55% (.25%) .30%
LB Municipal Bond Fund(2) On the portion of the Fund
which is:
$500,000,000 or less...... .575% (.25%) .325% $3,424,258(5)
Over $500,000,000 but not
over $1,000,000,000..... .5625% (.25%) .3125%
Over $1,000,000,000....... .55% (.25%) .30%
LB Money Market Fund(6) On the portion of the Fund
which is:
$500,000,000 or less...... .50% (.25%) .25% $2,210,254(4)
Over $500,000,000 but not
over $1,000,000,000..... .475% (.25%) .225%
Over $1,000,000,000 but not
over $1,500,000,000..... .45% (.25%) .20%
Over $1,500,000,000 but not
over $2,000,000,000..... .425% (.25%) .175%
Over $2,000,000,000....... .40% (.25%) .15%
LB High Yield Fund(2) On the portion of the Fund
which is:
$500,000,000 or less...... .65% (.25%) .40% $4,911,490(8)
Over $500,000,000 but not
over $1,000,000,000..... .60% (.25%) .35%
Over $1,000,000,000....... .55% (.25%) .30%
</TABLE>

13
<PAGE> 17

- ---------------

(1) Effective October 31, 1997, LB Research voluntarily agreed to permanently
waive a portion of its advisory fees for each of the Funds equal to 0.25% of
the average daily net assets of the Fund. This 0.25% waiver applies to the
contractual rates of compensation listed in the table above at each level of
average daily net assets.

(2) Effective January 1, 1997, LB Research has also voluntarily agreed to waive
5 basis points (0.05%) from the advisory fees payable by the LB Fund, LB
High Yield Fund, LB Income Fund, and LB Municipal Bond Fund. These voluntary
partial waivers of advisory fees may be discontinued at any time.

(3) LB Research waived fees with respect to the LB Fund totaling $385,904 for
the fiscal year ended October 31, 1997.

(4) LB Research waived fees with respect to LB Income Fund totaling $333,931 for
the fiscal year ended October 31, 1997.

(5) LB Research waived fees with respect to the LB Municipal Bond Fund totaling
$247,844 for the fiscal year ended October 31, 1997.

(6) LB Research has further undertaken, until October 31, 1998 and thereafter
until further notice to LB Money Market Fund, to waive its advisory fees in
order to limit LB Money Market Fund's total operating expenses for the Class
A, Class B shares and Institutional Class shares to 0.95%, 0.95%, and 0.70%,
respectively of the average net assets of the relevant class.

(7) LB Research waived fees with respect to the LB Money Market Fund totaling
$435,799 for the fiscal year ended October 31, 1997.

(8) LB Research waived fees with respect to the LB High Yield Fund totaling
$328,810 for the fiscal year ended October 31, 1997.

(9) LB Research has further undertaken until October 31, 1998 and thereafter
until further notice to LB Mid Cap Growth Fund to waive its advisory fee and
if necessary, to bear certain expenses associated with operating the Fund in
order to limit the Fund's total operating expenses for the Class A shares,
Class B shares and Institutional Class shares to an annual rate of 1.95%,
2.70%, and 1.70%, respectively, of the average daily net assets of the
relevant class.

14
<PAGE> 18

EXHIBIT B

<TABLE>
<CAPTION>
AGGREGATE ADMINISTRATIVE AGGREGATE TRANSFER
FEES PAID FOR THE AGENCY FEES PAID
FISCAL YEAR ENDED FOR THE FISCAL YEAR
NAME OF FUND OCTOBER 31, 1997 ENDED OCTOBER 31, 1997
------------ ------------------------ ----------------------
<S> <C> <C>
LB Opportunity Growth Fund...................... $55,875 $1,147,649
LB Mid Cap Growth Fund.......................... 617 21,145
LB World Growth Fund............................ 13,826 311,027
LB Fund......................................... 184,583 1,791,020
LB High Yield Fund.............................. 158,365 1,205,817
LB Income Fund.................................. 166,209 1,275,325
LB Municipal Bond Fund.......................... 122,078 492,743
LB Money Market Fund............................ 90,172 1,383,639
</TABLE>

15
<PAGE> 19
PRELIMINARY COPY
----------------

PLEASE MARK VOTES
[X] AS IN THIS EXAMPLE

<TABLE>
<S> <C>
- --------------------------------------------------------------
1. ELECTION OF TRUSTEES To withhold authority to vote for any
LUTHERAN BROTHERHOOD MONEY MARKET FUND individual nominee, strike a name through the nominee's name in
the list below.
- --------------------------------------------------------------
[ ] FOR all nominees listed below [ ] Vote withheld for all
nominees listed below

[ ] FOR all nominees listed below (except as marked to the
contrary below)

Rolf F. Bjelland Herbert F. Eggerding, Jr. Noel K. Estenson
Jodi Harpstead Richard A. Hauser Connie M. Levi
Bruce J. Nicholson Ruth E. Randall

2. To amend the Master Advisory Contract to authorize the Trustees
to reduce advisory fees.

[ ] For [ ] Against [ ] Abstain

3. To ratify the selection of PricewaterhouseCoopers LLP as the
Trust's independent accountants.

[ ] For [ ] Against [ ] Abstain

4. To amend the Fund's industry concentration policy.

[ ] For [ ] Against [ ] Abstain

RECORD DATE SHARES: THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
LUTHERAN BROTHERHOOD FAMILY OF FUNDS. THE ATTORNEYS NAMED WILL VOTE
THE SHARES REPRESENTED BY THIS PROXY IN ACCORDANCE WITH THE CHOICES
MADE ON THIS BALLOT. YOU MUST MARK THE BOX "ABSTAIN" IF YOU WISH TO
ABSTAIN. IF NO CHOICE IS INDICATED AS TO ANY ITEM, THIS PROXY WILL
BE VOTED AFFIRMATIVELY ON THESE MATTERS.
------------
Please be sure to sign Date and date this Proxy. Date
- --------------------------------------------------------------
Please sign exactly as your name appears herein. If shares are held
jointly, either holder may sign. Corporate proxies should be signed
by an authorized officer.
- --------------------------------------------------------------
Shareholder sign here Co-owner sign here
</TABLE>

LUTHERAN BROTHERHOOD MONEY MARKET FUND
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415-1625

PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 2, 1998

The undersigned shareholder(s) of LUTHERAN BROTHERHOOD MONEY MARKET FUND (the
"Fund") hereby appoints Otis F. Hilbert, Rolf F. Bjelland, James M. Odland and
John C. Bjork or any of them true and lawful proxies, with power of substitution
of each, to vote all shares which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held on December 2, 1998 at
the Lutheran Brotherhood Building, 625 Fourth Avenue South, Minneapolis,
Minnesota, at 9:00 a.m., local time, and at any adjournment(s) thereof (the
"Special Meeting"). Receipt of the Notice of the Proxy Statement for said
Special Meeting is acknowledged.

Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.

- --------------------------------------------------------------------------------
PLEASE RETURN TOP PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN THE
BOTTOM PORTION.
- --------------------------------------------------------------------------------

<PAGE> 20

PRELIMINARY COPY
----------------

PLEASE MARK VOTES
[X] AS IN THIS EXAMPLE

<TABLE>
<S> <C>
- --------------------------------------------------------------
1. ELECTION OF TRUSTEES To withhold authority to vote for any
[LUTHERAN BROTHERHOOD OPPORTUNITY GROWTH FUND] individual nominee, strike a name through the nominee's name in
the list below.
- --------------------------------------------------------------
[ ] FOR all nominees listed below [ ] Vote withheld for all
nominees listed below

[ ] FOR all nominees listed below (except as marked to the
contrary below)

Rolf F. Bjelland Herbert F. Eggerding, Jr. Noel K. Estenson
Jodi Harpstead Richard A. Hauser Connie M. Levi
Bruce J. Nicholson Ruth E. Randall

2. To amend the Master Advisory Contract to authorize the Trustees
to reduce advisory fees.

[ ] For [ ] Against [ ] Abstain

3. To ratify the selection of PricewaterhouseCoopers LLP as the
Trust's independent accountants.

[ ] For [ ] Against [ ] Abstain

[LUTHERAN BROTHERHOOD OPPORTUNITY GROWTH FUND]
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415-1625

PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 2, 1998

The undersigned shareholder(s) of [Lutheran Brotherhood Opportunity Growth Fund]
(the "Fund") hereby appoints Otis F. Hilbert, Rolf F. Bjelland, James M. Odland
and John C. Bjork or any of them true and lawful proxies, with power of
substitution of each, to vote all shares which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the Fund to be held on December
2, 1998 at the Lutheran Brotherhood Building, 625 Fourth Avenue South,
Minneapolis, Minnesota, at 9:00 a.m., local time, and at any adjournment(s)
thereof (the "Special Meeting"). Receipt of the Notice of the Proxy Statement
for said Special Meeting is acknowledged.

Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.